In this in-depth overview, we are providing a guide on the various iGaming payment solutions available in 2022.
It is well-known that the online iGaming industry, often perceived as high risk, suffers from a certain amount of bad press regarding AML and other financial insecurity so the importance of properly structured payment solutions is paramount.
Let's take a look at the main payment challenges in the iGaming sector.
What are the main payment challenges in iGaming?
Easy to use User Experience
One of the major challenges in online gaming is to provide an easy-to-use user experience on both desktop and mobile. This means that the interface should be as visually appealing as possible and what's more, easy to understand.
Another major challenge is that customers more often than not expect payments to be instant. Any hold-ups in the system may cause customer dissatisfaction which could lead to churn and thus a decrease in revenue.
The cost of payments can be too high
Another important factor when choosing iGaming payment solutions is the cost of payments. In a world where banking fees are on the increase, the use of a payment provider becomes all the more important to avoid higher costs.
Banks are constantly and continuously upping their charges and fees and this is creating an even more difficult situation for iGaming operators.
Difficulty to execute payments in certain jurisdictions
Not all jurisdictions are equal. When it comes to executing international payments for iGaming merchants, payment processors can find it challenging to serve certain jurisdictions. For example, Norway’s gambling regulator has ordered all local banks to block the flow of money from them for what they term 'unauthorized online casinos'. This has made Norway a very challenging jurisdiction, with many iGaming operators choosing not to serve that market.
Changing regulations on a national level
Beyond the fact that certain jurisdictions can prove to be difficult to serve, another significant challenge is the constantly changing regulations on a national level, making it hard to keep up across different markets. There is a whole myriad of regulations regarding payment processing and gambling which end up slowing down the process of market penetration and expansion.
Brands want to build customer loyalty
A crucial factor in any business partnership is loyalty and trust so it goes without saying that a good business relationship is imperative for a proper operation. A reliable payments partner is of course essential in this scenario for the processing of online payments.
Fraud prevention and security
With all the problems currently prevalent in the fintech sector, be it regulatory, fraud or scams, it is crucial that any payment processing system has to be highly fortified against fraud.
There have been well-documented cases of hacking and online theft which have left businesses on their knees. Payment security is of crucial importance in this regard.
Trends in iGaming Payment Solutions
The rise of mobile gaming payments
The demand for mobile games keeps increasing, with monetization challenges becoming more complex in the gaming industry.
Consistent adoption of cryptocurrency
Cryptocurrency is an increasingly popular payment option with online casinos. Players can instantly deposit and withdraw funds, benefit from low fees, and enjoy increased privacy.
As the online gambling industry continues to evolve, the need for faster payments has become ever more apparent. Operators know that in today’s culture of instant gratification, players expect to be able to access their winnings instantly and those brands that don’t facilitate this face a significant disadvantage on a product level.
Another important trend that is rapidly evolving in the gaming industry is the concept of open banking. Open Banking refers to the ability of banking customers to authorize third-party companies to access their bank account data to either collect account information and/or initiate payments.
There are many ways how Open Banking can be applied to the iGaming industry. For instance, using Open Banking, it is possible to connect via API to the customer's bank account from within the online casino or betting app, and deposit funds instantly.
High level of security
As already mentioned, the need for a foolproof payment processing system is paramount for the success of any iGaming business in processing transactions. A high level of security is necessary to establish trust within the market.
FinXP products and solutions for the iGaming industry
FinXP provides several payment products which are suited for the iGaming industry.
Credit Card Processing
Credit cards are still an important payment method in several countries such as France and Norway. FinXP processes payments from all major credit card brands such as VISA and Mastercard via its PCI DSS compliant payment gateway.
Alternative Payment Methods
Alternative payment methods (APMs) refer to payment methods other than card processing. Offering APMs is important as many of these payment options are very popular in certain countries, even more important than paying by card.
FinXP offers hundreds of APMs including popular brands such as Sofort, Giropay, PayPal, and more. Furthermore, we provide expert advice to clients informing them of which APMs they should be focusing on based on usage data in specific regions.
IBAN4U is a dedicated, online Payment Account that is ideal for iGaming operators and affiliates inside and outside the EU that want to do business in the EU. It is perfect for cross-border payments and ideal for paying employees, subcontractors and suppliers abroad. The account can also be used for receiving money from overseas customers.
IBAN4U is one of FinXP’s most sought-after services due to our fast account set-up plus the fact that the card can be combined with debit cards which can be used as company commercial cards.
Closed-Loop Payment Solutions
The Closed-Loop payment solution provides businesses and their customers with a common payments ecosystem. Merchant platforms and marketplaces can benefit from a unique B2B2C solution that facilitates the flow of funds from a business to its clients and users.
This solution enables easy and fast online payment account creation and direct money transfer. This allows merchants to make payments to end customers (and vice-versa) quickly, securely, and across all borders.
What is the right solution for the iGaming industry where payments are concerned?
First and foremost, it is crucial to have the right Payment Service Provider who understands the iGaming industry with multiple solution offerings. With an industry that is changing constantly and with geopolitical challenges such as regulation becoming ever more onerous, the need to have a top-notch payments provider is paramount
If you have any queries or wish to be introduced to our services such as our IBAN accounts and payment gateway, or if you'd like to explore the possibility of a custom payment service, please reach out to us via our contact page.